Bledsoe v. FCA US LLC

663 F.Supp.3d 753

James BLEDSOE, et al., individually and on behalf of all others similarly situated, Plaintiffs, v. FCA US LLC, a Delaware corporation, and Cummins Inc., an Indiana corporation, Defendants.

4:16-CV-14024-TGB-RSW

United States District Court, E.D. Michigan, Southern Division

Signed March 23, 2023

Caroline F. Bartlett, Zachary Allen Jacobs, James E. Cecchi, Lindsey H. Taylor, Roseland, NJ, Carella, Byrne, Cecchi, Olstein, Brody and Agnello, Roseland, NJ, Christopher L. Ayers, Christopher A. Seeger, Seeger Weiss LLP, Ridgefield Park, NJ, Dennis A. Lienhardt, Sharon S. Almonrode, William Kalas, Emily E. Hughes, E. Powell Miller, The Miller Law Firm, P.C., Rochester, MI, Dorothy Antullis, Mark Jeffrey Dearman, Paul Jeffrey Geller, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Jerrod C. Patterson, Shelby Smith, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, Scott A. George, Seeger Weiss LLP, Philadelphia, PA, for Plaintiffs Jay Martin, Martin Rivas.

Caroline F. Bartlett, Zachary Allen Jacobs, James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody and Agnello, Roseland, NJ, Christopher L. Ayers, Christopher A. Seeger, Seeger Weiss LLP, Ridgefield Park, NJ, Dennis A. Lienhardt, William Kalas, E. Powell Miller, Emily E. Hughes, The Miller Law Firm, P.C., Rochester, MI, Dorothy Antullis, Mark Jeffrey Dearman, Paul Jeffrey Geller, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Shelby Smith, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiffs Alan Strange, Matt Langworthy.

Caroline F. Bartlett, Zachary Allen Jacobs, James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody and Agnello, Roseland, NJ, Christopher L. Ayers, Christopher A. Seeger, Seeger Weiss LLP, Ridgefield Park, NJ, Dennis A. Lienhardt, William Kalas, E. Powell Miller, Emily E. Hughes, The Miller Law Firm, P.C., Rochester, MI, Dorothy Antullis, Mark Jeffrey Dearman, Paul Jeffrey Geller, Robbins Geller Rudman & Dowd LLP, Boca Raton, FL, Garth D. Wojtanowicz, Shelby Smith, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiffs Dawn Roberts, Marty Ward, Marc Ganz.

Dennis A. Lienhardt, The Miller Law Firm, P.C., Rochester, MI, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiff Donovan Kerber.

Carl Lansing Rowley, Thompson Coburn LLP, St. Louis, MO, Daniel A. Loevinsohn, Sullivan & Cromwell LLP, Palo Alto, CA, Derek H. Swanson, Klein Thomas Lee & Fresard, Richmond, VA, Fred J. Fresard, Ian Kennedy Edwards, Klein Thomas Lee & Fresard, Troy, MI, James P. Feeney, Paul L. Nystrom, Dykema Gossett, Bloomfield Hills, MI, Jonathan W. Garlough, Foley & Lardner LLP, Chicago, IL, Stephen A. D'Aunoy, Thompson Coburn LLP, Saint Louis, MO, Thomas L. Azar, Jr., Thompson Coburn LLP, Saint Louis, MS, for Defendant FCA U.S. LLC.

Jeffrey Soble, Jonathan W. Garlough, Lauren M. Loew, Susan L. Poll Klaessy, Foley & Lardner LLP, Chicago, IL, Leah R. Imbrogno, Vanessa L. Miller, Foley & Lardner LLP, Detroit, MI, Michael D. Leffel, Foley & Lardner LLP, Madison, WI, for Defendant Cummins Inc.

ORDER DENYING IN PART AND GRANTING IN PART DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

(ECF NOS. 218, 221, 263)

TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE

This case is filed as a putative class action by Plaintiffs James Bledsoe, Paul Chouffet, Michael Erben, James Forshaw, Marc Ganz, Donavan Kerber, Jeremy Perdue, Dawn Roberts, Marty Ward, and Martin Witberg ("Plaintiffs") on behalf of a nationwide class of consumers who purchased Dodge Ram 2500 and 3500 diesel trucks ("the Trucks") manufactured and sold by Defendants FCA US LLC ("FCA") and Cummins Inc. ("Cummins") between 2007 and 2012. Plaintiffs allege that the Trucks they purchased emit nitrogen oxide ("NOx") at levels that exceed federal and state emissions standards as well as the expectations of reasonable consumers. Plaintiffs allege that they purchased their Trucks based on Defendants' advertising that touted the Trucks as more fuel efficient and environmentally friendly than other diesel trucks. Plaintiffs allege that despite marketing the Trucks as having "clean diesel engines," Defendants knew the Trucks discharged emissions at levels greater than what a reasonable consumer would expect based on the alleged representations.

Defendants have moved for summary judgment on all claims. Defendants argue that Plaintiffs lack Article III standing, the Clean Air Act ("CAA") preempts Plaintiffs' claims, Plaintiffs lack standing to bring Racketeer Influenced and Corrupt Organizations Act ("RICO Act") claims, and Plaintiffs' state law claims fail for various reasons. Defendant Cummins's Motion for Summary Judgment, ECF No. 218; Defendant FCA's Motion for Summary Judgment, ECF No. 221. Defendant FCA has also moved for summary judgment on the claims of Plaintiff Donovan Kerber, a potential class representative who was added to the case in July 2022. Defendant FCA's Motion for Summary Judgment on Claims of Plaintiff Donovan Kerber, ECF No. 263. Per the Court's Case Management Order, the Court addresses summary judgment before class certification. ECF No. 249, PageID.34864. For the reasons explained below, Defendants' motions for summary judgment are DENIED in part and GRANTED in part.

TABLE OF CONTENTS

I. BACKGROUND ... 769

II. LEGAL STANDARD ... 771

III. DISCUSSION ... 771

A. Defendants Cummins and FCA ... 771

B. Plaintiffs and the Putative Class ... 773

1. James Bledsoe ... 774

2. Paul Chouffet ... 774

3. Marc Ganz ... 775

4. Jeremy Perdue ... 775

5. Dawn Roberts ... 775

6. Michael Erben ... 776

7. James Forshaw ... 776

8. Marty Ward ... 776

9. Martin Witberg ... 776

10. Donovan Kerber ... 777

C. Plaintiffs' Experts Juston Smithers and Edward Stockton ... 778

1. Smithers' Technical Opinions ... 778

a. Excessive Active Regeneration as an Excessive Emissions Device ("EED") ... 778

b. Smithers' Inadmissible Opinions on Defeat Devices and Cummins' Alleged Fraud on the Regulators ... 779

2. Stockton's Damages Opinions ... 780

D. General Principles of Article III Standing ... 781

E. Plaintiffs Have Sufficiently Demonstrated Injury-in-Fact and Causation... 781

1. Plaintiffs' Alleged Overpayments Confer Standing Because They Are Injuries-in-Fact... 781

2. Plaintiffs Demonstrate Causation Because Their Alleged Injuries Are Fairly Traceable to Defendants' Conduct ... 782

F. Plaintiffs Lack RICO Standing as Indirect Purchasers ... 784

G. Plaintiffs' Claims Are Not Preempted by the Clean Air Act ... 785

H. State Law Consumer Protection, Fraudulent Concealment, and Breach of Contract Claims ... 787

1. Fraud-Related Claims Generally... 787

2. Breach of Contract Claims ... 788

I. State-by-State Discussion of Plaintiffs' Individual State Law Claims ... 788

1. Michigan State Law Claims ... 788

a. Michigan Fraudulent Concealment Claim ... 789

2. Illinois State Law Claims ... 790

a. Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") Claim ... 790

b. Illinois Fraudulent Concealment Claim ... 791

c. Illinois Breach of Contract Claim ... 792

3. Idaho State Law Claims ... 794

d. Idaho Consumer Protection Act ("ICPA") Claim ... 794

e. Idaho Fraudulent Concealment Claims ... 794

4. California State Law Claims ... 795 a. California Unfair Competition Law ("UCL"), Consumer Legal Remedies Act ("CLRA"), False Advertising Law ("FAL"), and Fraudulent Concealment Claims ... 795

i. Bledsoe's UCL, CLRA, FAL, and Fraudulent Concealment Claims Against Cummins ... 796

ii. Kerber's UCL, CLRA, FAL, and Fraudulent Concealment Claims Against FCA ... 797

b. Kerber's MMWA Claim ... 800

c. Kerber's California Breach of Contract Claim Against FCA ... 800

5. South Carolina Law Claims ... 800

6. New Mexico Law Claims ... 801

a. Whether Plaintiff Ward's New Mexico Unfair Trade Practices Act ("NMUTPA") Claim is Time-Barred... 801

b. Duty to Disclose Under the NMUTPA ... 802

c. New Mexico Economic Loss Rule ... 802

d. New Mexico Breach of Contract Claim ... 802

7. North Carolina State Law Claims ... 803

a. North Carolina Unfair and Deceptive Trade Practices Act ("NCUDTPA") and Fraudulent Concealment Claims ... 803

b. North Carolina Breach of Contract Claim ... 805

8. Texas State Law Claims ... 805

a. Texas Deceptive Trade Practices Act ("DTPA") and Fraudulent Concealment Claims ... 805

J. Standing Issues Related to State Law Claims Lacking a Corresponding Potential Class Representative ... 807

IV. CONCLUSION ... 808

I. BACKGROUND

Plaintiffs seek to bring a nationwide class action, with sub-classes in all 50 states and the District of Columbia. They allege that Defendant FCA's 2007-2012 Dodge Ram 2500 and 3500 Trucks, equipped with 6.7-liter Turbo Diesel engines manufactured by Defendant Cummins, emit nitrogen oxide ("NOx") in real-world driving at levels that exceed federal and state emissions standards as well as the expectations of reasonable consumers.

Plaintiffs allege that they purchased their Trucks based on Defendants advertising the Trucks as more fuel efficient and environmentally friendly than other diesel trucks. Plaintiffs specifically claim that Defendants knew the Trucks discharged emissions in real-world driving at levels greater than what a reasonable consumer would expect, but continued to market them as using "clean diesel" technology. In Plaintiffs' operative Third Consolidated and Amended Class Action Complaint ("TCAC"), they allege violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), the Magnuson Moss Warranty Act ("MMWA"), and consumer protection, breach of contract, and fraudulent concealment laws of 50 states as well as the District of Columbia. ECF No. 255.

Defendants previously moved to dismiss Plaintiffs' Second Consolidated and Amended Class Action Complaint ("SCAC"). ECF Nos. 67, 68. This Court granted Defendants' motions on Plaintiffs' MMWA claim, but denied them for all other claims. ECF No. 97. Later, Defendant FCA moved for judgment on the pleadings on the SCAC as to Plaintiffs Bledsoe, Erben,...